A mutual fund’s net asset value is $39.30, but the fund charges a 3 percent load fee (front- loaded) and an exit fee of 1 percent (if redeemed in 6 months) of net asset value. An individual client purchases 10 shares of the mutual fund on Jan 5 of year 20X1. During the year 20X1, the fund distributes $3.45 capital gain and $0.75 dividend income. The net asset value rises to $42.12 on Jan 5 of year 20X2 and the investor redeems the shares. a) What is the percentage return the fund can report that was achieved by its portfolio managers? b) What is the percentage return the individual earned on the investment? Why is this answer different from the answer in part (a)?

A mutual fund’s net asset value is $39.30, but the fund charges a 3 percent load fee (front- loaded) and an exit fee of 1 percent (if redeemed in 6 months) of net asset value. An individual client purchases 10 shares of the mutual fund on Jan 5 of year 20X1. During the year 20X1, the fund distributes $3.45 capital gain and $0.75 dividend income. The net asset value rises to $42.12 on Jan 5 of year 20X2 and the investor redeems the shares. a) What is the percentage return the fund can report that was achieved by its portfolio managers? b) What is the percentage return the individual earned on the investment? Why is this answer different from the answer in part (a)?

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter3: Data Visualization

Section: Chapter Questions

Problem 6P: The file MutualFunds contains a data set with information for 45 mutual funds that are part of the...

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